1/8: Now that we have both the UK and EU mandates for #Brexit part 2, what chance an agreement? It’s not looking great. Much will depend in the end on political will. A short thread...
2/8: In terms of practical outcomes the two “visions” of the future (if that is the word) are not that far apart. But in terms of philosophy and structure, there is an ocean between them.
3/8: Big problems are looming on the level playing field for market rules, governance of a deal, fish and financial services. They will have to be hammered out before the June stocktake. If we can get beyond them, the landing zone for a wider deal may emerge.
4/8: That eventual deal would be narrow and involve zero tariff and zero quota access for goods, based on a UK compromise on binding non-regression of market rules and governance, and an EU compromise on dynamic alignment and the role of the ECJ. Plus a fudge on fish.
5/8: Such a deal is still in the interests of both sides. But we have clearly crossed the Rubicon of border frictions from customs process and checks on goods. Many of the issues we considered when looking at “no deal” last year will resurface.
6/8: The prospects for services look dim. The UK is asking a lot and the incentives for the EU are not clear. While the UK continues to talk up services regulatory divergence the EU will be reluctant to consider concessions.
7/8: In the UK, the political cost of no deal is now much smaller than the impact on business. This is a very different UK government operating in a different context. Many Conservative MPs and ministers believe that walking away is acceptable (or desirable).
8/8: Reaching a #Brexit agreement at the end of 2020 will cost both B Johnson and EU members political capital. Will they summon the will to spend that capital? Of course they should, but it is a long road ahead..
